Opportunities outweigh the challenges ahead for Thai mobile operators

After the auction planned for September 2014 for 1 800 MHz spectrum, InfoCom expects the Thai mobile market to expand rapidly in the following five years. The evolution will involve more the service side, as the already high mobile penetration rate in the country will dictate the operators to focus increasingly on enticing their subscribers to migrate to 3G and 4G packages to generate additional revenue streams.

The additional network capacity and the impending 4G auction in 2014 will enable the operators to match the demand for mobile services requiring higher bandwidths as high-definition voice and video services. The new auction setup is also a more favourable market scheme for mobile operators than in the past. The framework, in fact, does not foresee a revenue-sharing agreement that requires to remit about 30% of service revenues to the state-owned enterprises. This frees more investments to network upgrades and service improvements and will positively impact the KPIs of the mobile providers in the long run.

While this scenario promises opportunities and is potentially a rosier outlook, mobile operators are expected to face stiff regulations to keep mobile service prices accessible to the masses, in line with the government’s initiatives to increase mobile device usage (e.g. the one tablet per child program). In the past, the regulator NBTC has already ordered operators to reduce tariffs as well as interconnection charges. Thus, considering the increasing level of competition, Thai ARPU levels will be probably negatively impacted.

In this changing mobile landscape, state-owned operators CAT and TOT are expected to increasingly profile as wholesale mobile providers and focus more on developing their fixed line networks. TOT, for instance, froze its 3G expansion to focus on ramping-up its Wi-Fi deployments, alongside its plan to deploy FTTH. Meanwhile, CAT is positioning as a host network provider, accommodating services for five MVNOs.